Trust us, we know that “getting hacked” seems scary enough on its own. However, there are additional consequences that go along with a breach or cyber incident that you should be aware of—including some you may not have realized.
Financial
1. Theft
One of the more straightforward (and common) cyberattack fears is that an attacker will “hack” an organization’s bank account, or otherwise gain access to steal their money. The truth is, there are plenty of attack methods that pose a lower risk to the criminal than a bank heist… while still offering a high reward. In the United States, the average cyberattack cost per breached record is $242. The bad guys can sell anything on the dark web, from payment card info to medical records, and they can get an even bigger payout selling aggregate data.
2. Downtime Costs
The operational downtime caused by a cyber incident is not always top of mind when thinking of cyberattack costs, but it adds up. According to a the most recent calculations, the average cost of downtime for a small business can range from $137 to $427 per minute.
You can calculate the estimated cost of downtime for your organization using a formula for productivity costs and revenue loss to learn the true impact of downtime on your finances.
3. Fines & Fees
Regulatory fines and legal fees will hit you when you’re down. Based on your industry and compliance requirements, you may be subject to data breach fines from governing bodies or compliance organizations like the PCI-SCC or HIPAA. On top of that, if your incident exposes sensitive customer or client data, you may have a lawsuit on your hands.
4. Forensic Investigation Costs
To be able to move from downtime back into uptime, you’ll need to get the incident under control, learn the extent of what happened, and properly remediate. In most situations, this requires thorough forensic investigation with cyber incident professionals. Cybersecurity firms provide this service to businesses who experience a breach, which is often referred to as a (cyber) Incident Response, or IR.
5. Recovery & Replacement Costs
As you recover from an incident, you may have technology in your organization that was damaged and needs repaired or replaced. Additionally, outdated or non-functioning security tools that may have led to the breach may need to be upgraded or replaced as you strengthen your security protection.
6. Lost Revenue
One financial consequence that may be hard to measure upfront is the loss of revenue when customers leave—or when potential customers choose a competitor instead after hearing of your security incident.
Operational
1. Lost Files & Data
Ransomware, one of the increasingly common small business attacks, not only results in your business files being “locked up” for a period of time—it’s also possible that you may lose them permanently. Some ransomware variants have been discovered to delete victim files, even if payment is made. Without robust backup systems in place, a cyberattack could mean losing everything for some organizations—and even with the option to restore from backup, the act of restoring is not always guaranteed to end the attack.
2. System Downtime & Disruption
Downtime not only incurs financial costs, but operational setbacks as well. If a part (or all) of your systems go down, team members across your organization will be halted in their daily tasks—from handling your accounting to helping customers.
3. Employee (and Customer) Turnover
When an incident sets you back, you may experience turnover of stressed employees or displeased customers during the long incident recovery phase.
Reputational
1. Lawsuits
As mentioned previously, if your incident results in a breach of customer information, you may face legal action. Not only does this incur financial costs in terms of lawyers and settlements, but the legal proceedings may affect your customers’ perceptions about your organization.
2. Loss of Customer Trust
A 2017 Ponemon Institute study revealed that 65% of consumers lose trust in an organization they do business with after a breach, and only 42% of surveyed Americans are likely to go back to doing business with that organization after a breach. Take the Target breach for example: in the months following the incident, Target saw a significant decline in both online and in-store traffic.
3. Diminished Public Reputation
Those who may have thought (and spoken) highly of your organization before a breach may change their tone after losing trust in your security. If payment card info is affected in your incident, your reputation could be at a higher risk.
Prioritizing Prevention
The cost of Incident Response services and breach recovery will always be more damaging than what it would have cost to invest proactively in cybersecurity. Take a look at what security measures you already have in place and determine if your current setup is providing the best protection for your organization. Mitigate your existing security vulnerabilities, including the human-error element of your security, then add what’s missing from your security lineup by striving to cover the four basics of cybersecurity: Prevention, Protection, Detection, and Response.
Not sure where to start? Reach out to our experts today.
